Shopping for auto insurance can be complicated. There are different factors that affect the coverage and determine the rates. If you don't know what you are doing, you could end up paying more for your insurance while not getting the coverage you need. That's why it is best to have your J.P. Perry Insurance agent shop the market for you. But so you will know what some of those factors are in determining coverage and rates, we have listed a few major issues...
How Prices Are Determined - First, it is important to understand how companies establish their rates. Each company has its own formula, but they tend to use the same basic factors. These include make and model; how you use the vehicle; commuting time; and your driving record. Plus, they use factors such as age, gender and martial status. They also look at where you live, rural area vs. city. And, most likely they will use your credit score.
Collision And Comprehensive Coverage - According to the Insurance Information Institute, 68% of Americans don't understand the difference between collision and comprehensive coverage. So they could easily short-change themselves in this area if they are purchasing insurance themselves. Comprehensive coverage provides protection against theft and damage caused by an incident other than a collision. This could include fire, flood, vandalism, hail, or falling trees and tree limbs. Collision reimburses you for damage to your car as a result of a collision with another vehicle or object when you are at fault. Both comprehensive and collision coverage are optional insurance that protects your car.
Personal Auto Insurance Doesn't Cover Your Vehicle For Business Use- Most policies exclude driving a personal vehicle for business purposes. And many companies will cancel your policy if they discover you are doing this. Even if you are doing some business on the side (Uber, pizza delivery, care giver service), you need to make sure you have coverage. Talk to your J.P. Perry agent about getting an "endorsement" to your policy to cover your risk.
If Someone Else Drives Your Car, Your Insurance Covers If They Have An Accident - The standard in the insurance industry is auto insurance follows the car, not the driver. So when you lend someone your vehicle, you are also lending them your insurance. While this sounds good that your car is protected, it should also make you aware that their accident could affect your insurance rates.
Letting Your Insurance Lapse Could Increase Your Rates When You Renew - If for some reason you let your insurance lapse, thinking you're not going to drive for a while; you forget to pay the renewal bill; or for whatever reason, your rates could be higher when you resume your coverage. Even a one day lapse in coverage could result in higher premiums. If you won't be driving for a while or have some financial issue for not paying, you need to alert the insurance company immediately.
These are just a few factors that come into play when purchasing auto insurance. Your best plan of action is to avoid these potential pitfalls by having your J.P. Perry agent help you shop for auto insurance.